Author: finralawyer

Hanley Law Investigates Pennsylvania broker Austin Dutton Formerly Registered with Newbridge Securities and Associated with Bridge Valley Financial Services

According to FINRA’s Brokercheck, Austin Dutton was registered with Newbridge Securities from August 2007 to August 2017.  In July 2017, the Pennsylvania Department of Banking and Securities fined Austin Dutton $200,000 for dishonest or unethical practices in the securities business.   Furthermore, in July 2017 the state of Pennsylvania fined Newbridge Securities $499,000 for failing to supervise a broker with sales of structured products to clients within the state.

According to Investment News, Mr. Dutton was well known in the Philadelphia area as a leading seller of REITs managed by American Realty Capital.  American Realty Capital is a real estate investment company controlled by Nicholas Schorsch.  Hanley Law is investigating whether clients may have also bought REITs sponsored by United Development Funding.  United Development Funding had its offices raided by the FBI two years ago after a hedge fund alleged it was operating like a Ponzi scheme.  Austin Dutton was affiliated with Bridge Valley Financial Services.

Dutton entered the securities industry in 1996.  He was registered with seven firms, including Newbridge Securities Corporation which he joined in August 2007.  According to FINRA’s Brokercheck, Austin Dutton was registered with the securities industry for 21 years, and was registered with the following firm(s):

Sandlapper Securities, LLC
CRD# 137906
Greenville, SC
09/2017-Present

Center Street Securities, Inc.
CRD# 26898
Nashville, TN
07/2017- Present

Newbridge Securities Corporation
CRD# 104065
Furlong, PA
08/2007-07/2017

Boenning & Scattergood, Inc.
CRD# 100
Langhorne, PA
01/2002-08/2007

Ferris, Baker Watts Incorporated
CRD# 285
Baltimore, MD
06/2000-01/2002

A.G. Edwards & Sons, Inc.
CRD# 4
St. Louis, MO
12/1997-07/2000

Prudential Securities Incorporated
CRD# 7471
New York, NY
06/1996-11/1997

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  Hanley Law is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  Hanley Law represents clients nationwide in cases against the major Wall Street broker dealers, including Newbridge Securities Corporation.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact Hanley Law to discuss your legal options. Contact Hanley Law at (239)649-0050 or contact us through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

FINRA Sanctions Morgan Stanley $13 Million in Fines and Restitution for Failing to Supervise Sales of Unit Investment Trusts (“UIT’s”)

FINRA has fined Morgan Stanley Smith Barney LLC $3.25 million and required the firm to pay approximately $9.78 million in restitution to more than 3,000 affected customers for failing to supervise its representatives’ short-term trades of unit investment trusts (UITs).

A Unit Investment Trust (“UIT”) is an investment company that offers units in a portfolio of securities that terminates on a specific maturity date, often after 15 or 24 months. UITs impose a variety of charges, including a deferred sales charge and a creation and development fee, that can total approximately 3.95 percent for a typical 24-month UIT. A registered representative who repeatedly recommends that a customer sell his or her UIT position before the maturity date and then “rolls over” those funds into a new UIT causes the customer to incur increased sale charges over time, raising suitability concerns according to FINRA.

FINRA found that from January 2012 through June 2015, hundreds of Morgan Stanley representatives executed short-term UIT rollovers, including UITs rolled over more than 100 days before maturity, in thousands of customer accounts. FINRA further found that Morgan Stanley failed to adequately supervise representatives’ sales of UITs by providing insufficient guidance to supervisors regarding how they should review UIT transactions to detect unsuitable short-term trading, failing to implement an adequate system to detect short-term UIT rollovers, and failing to provide for supervisory review of rollovers prior to execution within the firm’s order entry system. Morgan Stanley also failed to conduct training for registered representatives specific to UITs.

Susan Schroeder, FINRA Executive Vice President and Head of Enforcement, said, “Due to the long-term nature of UITs, their structure, and upfront costs, short-term trading of UITs may be improper and raises suitability concerns. Firms must adequately supervise representatives’ sales of UITs –including providing sufficient training –and have in place a system to detect potentially unsuitable short-term UIT rollovers.”

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  The firm handles cases against the major Wall Street broker dealers, including Morgan Stanley.

Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

FINRA Elder-Abuse Rule to Take Effect Next Month

A new FINRA regulation taking effect on February 5, 2018 is designed to prevent financial exploitation of seniors and will result in what could be challenging conversations between brokers and older clients.  The rule requires that brokers make a reasonable effort to identify a trusted person who can be contacted if the broker is concerned that the client is suffering from diminished mental capacity or is the target of a scam. The request for a trusted contact must be made at account openings for new clients and during account updates with existing clients. The regulation also provides brokers with liability protection if they place a hold on disbursements from an account because they think their clients could be harmed.

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  The firm handles cases against the major Wall Street broker dealers.

Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

Principal Securities, Inc. fka Princor Financial Services Corporation Censured and Fined by FINRA for Annuity Sales Practices

According to FINRA’s Disciplinary and Other Actions publication, FINRA censured and fined Principal Securities, Inc. fka Princor Financial Services Corporation (CRD # 1137) $250,000.  Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that for at least three years, its system for supervising additions to existing variable annuities was not reasonably designed to ensure that they complied with applicable securities laws and rules, including those governing suitability (See FINRA Case #2015047322502).

FINRA alleged that from October 2013 to September 2016, Principal Securities customers added money to existing variable annuities on more than 6,000 occasions. Those additions accounted for approximately one-sixth of Principal Securities’ revenue from variable products during that period.

While Principal Securities reviewed some of those additions the scope of that supervision was unreasonably limited. First, the exception reports covered only transactions involving one of Principal Securities’ affiliates, not all or the existing variable annuities that Principal Securities’ customers held. Second, the exception reports covered only additions to existing variable annuities that were funded by surrendering insurance products, not all sources.  For example, the exception reports did not cover additions that were funded by rolling over a retirement plan. Third, Principal Securities’ supervisors used the exception reports to identify trading trends and patterns, rather than to evaluate the propriety of individual additions. Fourth, Principal Securities’ periodic audits covered only selected customers, not additions to existing variable annuities generally or patterns of recommendations to make such additions.

As a result of those and other limitations, Principal Securities’ system for supervising additions to existing variable annuities was not reasonably designed to comply with applicable securities laws and rules, including those governing suitability.  Principal Securities’ system did not capture, so the firm did not review, more than two-thirds of those additions. Principal Securities’ system was not reasonably designed to focus on the additions that posed the greatest risk to the firm’s customers such as additions resulting in high concentrations of customers’ net worth in variable contracts, or additions by customers whose financial needs and goals had changed since they initially purchased their contracts. As a result, Principal Securities’ system was not likely to detect and flag relatively risky transactions, such us a large addition to a contract long after it was purchased, prompted by a recommendation front an associated person, so that the firm could determine whether such recommendations violated any securities laws or rules.

Those gaps in Principal Securities’ system resulted in improper transactions escaping detection by the firm, causing harm to contract holders. For example, Principal Securities did not detect recommended in-and-out trading between a customer’s variable annuities, which resulted in frequent and unnecessary surrender charges, nor did the firm detect another customer’s excessive concentration in a variable annuity resulting from a $300,000 addition to that contract which was more than doubled the customer’s initial investment.

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  The firm handles cases against the major Wall Street broker dealers, including Principal Securities, Inc. fka Princor Financial Services Corporation.

Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

 

Interactive Brokers LLC Censured and Fined Relating to the Firm’s Supervisory System

According to FINRA’s Disciplinary and Other Actions publication, FINRA censured and fined Interactive Brokers LLC (CRD #36418).   On October 18, 2017, an Acceptance Waiver and Consent (“AWC”) was issued in which the firm was censured and fined a total of $70,000.  Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that the firm failed to establish and maintain a supervisory system reasonably designed to achieve compliance with applicable securities laws and regulations regarding the use of intermarket sweep orders. FINRA found that given the recurring nature of the violations from January 2015 through December 2015, the firm’s supervisory system was inadequate. (FINRA Case #2014041235404).

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  The firm handles cases against the major Wall Street broker dealers, including Interactive Brokers.

Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

Ameriprise Financial Services Censured and Fined Relating to the Sale of Securities to Non-Qualified Investors

According to FINRA’s Disciplinary and Other Actions publication, FINRA has fined Ameriprise Financial Services, Inc. (CRD #6363).  On October 13, 2017, an Acceptance Waiver and Consent (“AWC”) was issued in which the firm was censured and fined $45,000.  Without admitting or denying the findings, Ameriprise Financial Services consented to the sanctions and to the entry of findings that it effected municipal bond transactions in amounts below the minimum denomination set for the bonds. FINRA’s findings stated that the firm also recommended and sold securities to customers who were not qualified institutional buyers (QIBs), because the firm was unaware of such sales restrictions in the official statements. The official statements for these securities explicitly limited their sale/resale to qualified institutional buyers. By lacking awareness of such a material fact about the securities due to its failure to review such official statements, Ameriprise Financial Services, Inc. failed to exercise reasonable diligence to form a reasonable basis to believe that the recommended transactions were suitable under the “reasonable-basis” obligations of the suitability requirements. The findings also stated that Ameriprise Financial Services, Inc. failed to disclose to customers at or prior to the time of the trade that the transaction was being effected in an amount below the minimum denomination, of the above sales restriction, and the potential adverse effect on liquidity of a customer position below the minimum denomination. The findings also included that Ameriprise Financial Services supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to the applicable securities laws and regulations, and the Municipal Securities Rule Making Board (See FINRA Case #2015046583001).

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  The firm handles cases against the major Wall Street broker dealers, including Ameriprise Financial Services.

Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

St. Albans, Missouri broker William August Glaser of National Planning Corporation Barred by FINRA

According to FINRA’s Disciplinary and Other FINRA Actions publication broker William August Glaser (CRD# 1274847) of St. Albans Missouri was barred from association with any FINRA member in all capacities for failing to provide documents and information requested by FINRA in connection with FINRA’s Department of Enforcement’s investigation concerning the circumstances surrounding the termination of Glaser’s registration by National Planning Corporation. The findings stated that the National Planning Corporation terminated Glaser’s registration, reporting that it had received an arbitration claim alleging that he had solicited a private investment away from the firm (FINRA Case # 2017054809301).

Glaser entered the securities industry in 1984. He was registered with eight firms before joining National Planning Corporation in December 2007. National Planning Corporation terminated Glaser’s registration on July 5, 2017.

According to FINRA’s Broker Check, William August Glaser was registered with the securities industry for 33 years, and was registered with the following firm(s):

National Planning Corporation
CRD# 29604
St. Albans Rd, MO
12/2007 – 7/2017

Investment Planners, Inc.
CRD# 18557
Chesterfield, MO
1/2002- 12/2007

Cutter & Company, Inc.
CRD# 22449
Ballwin, MO
9/1996 – 12/2001

J.E. Liss & Company, Inc.
CRD# 21950
Milwaukee, WI
7/1991-9/1996

Walnut Street Securities, Inc.
CRD# 15840
El Segundo, CA
12/1989 – 7/1991

Investment Management & Research, Inc.
CRD# 6694
St. Petersburg, FL
7/1989-12/1989

Integrated Resources Equity Corp.
CRD# 6403
2/1989 – 7/1989

Mark Twain Brokerage Services, Inc.
CRD# 16925
11/1987 – 12/1988

ISFA Corporation
CRD# 12984
7/1984- 11/1987

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  Hanley Law is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  Hanley Law represents clients nationwide in cases against the major Wall Street broker dealers.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact Hanley Law to discuss your legal options. Contact Hanley Law at (239)649-0050 or contact us through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

Colorado Springs CO Broker Bruce Page Barber of Securities America Barred by FINRA

According to FINRA’s Disciplinary and Other FINRA Actions publication broker Bruce Page Barber (CRD# 3095959) of Colorado Springs CO was barred from association with any FINRA member in all capacities for failing to provide documents and information requested by FINRA in connection with FINRA’s Department of Enforcement’s investigation concerning Barber’s outside business activity and solicitation of Firm customers to invest in a private securities offering (FINRA Case #2017053346301).

FINRA rules provide, in relevant part, that “[f]or the purpose of an investigation, complaint, examination, or proceeding authorized by the FINRA By-Laws or rules … FINRA staff shall have the right to … require a member, person associated with a member, or any other person subject to FINRA’s jurisdiction to provide information orally, in writing, or electronically … with respect to any matter involved in the investigation, complaint, examination, or proceeding.”  FINRA Rule 2010 requires that associated persons, in the conduct of their business, observe high standards of commercial honor and just and equitable principles of trade. A failure to comply with FINRA Rule 8210 is a violation of FINRA Rule 2010.

FINRA’s enforcement division commenced an investigation into allegations that Barber engaged in an undisclosed outside business activity by serving as an advisor to the Board of Directors for ABC, LLC (“ABC”), for which he was compensated with warrants, and for soliciting 15 Firm customers to invest in ABC’s private securities offering.  FINRA enforcement sent a letter to Barber requesting that he provide certain documents and information to FINRA. FINRA advised Barber that his failure to provide the requested information could subject him to disciplinary action and the imposition of sanctions, including a bar from the securities industry. Barber informed FINRA that he received their request, and that he would not cooperate with FINRA’s investigation.

According to FINRA’s Broker Check, Bruce Barber was registered with the securities industry for 19 years, and was registered with the following firm(s):

Securities America, Inc.

CRD # 10205

Colorado, Springs, CO

12/2000 – 2/2017

Lincoln Investment Planning, Inc.

CRD # 519

Fort Washington, PA

8/1998 – 12/2000

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  Hanley Law is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  Hanley Law represents clients nationwide in cases against the major Wall Street broker dealers.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact Hanley Law to discuss your legal options. Contact Hanley Law at (239)649-0050 or contact us through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

 

 

AEGIS CAPITAL CENSURED, FINED AND ORDERED TO PAY RESTITUTION

FINRA recently issued an Acceptance Waiver and Consent (“AWC”) with Aegis Capital in which Aegis Capital was censured, fined $27,500, ordered to pay $620.30, plus interest, in restitution to customers, and required to revise its written supervisory procedures. (See FINRA Case #2016048939201). Aegis consented to the sanctions and to the entry of findings that it failed to execute orders fully and promptly. FINRA’s findings stated that the firm failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such a market so that the resultant price to its customer was as favorable as possible under prevailing market conditions. FINRA’s findings also stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to certain applicable securities laws and regulations and FINRA rules. FINRA further found that Aegis Capital’s written supervisory procedures failed to sufficiently provide for one or more of the minimum requirements for adequate FINRA compliance.

FINRA found that in 22 instances, Aegis Capital failed to execute orders fully and promptly. Additionally, for 11 of the above-referenced 22 orders, the firm failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions. FINRA found that Aegis Capital’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to certain applicable securities laws and regulations and the Rules of FINRA.

Aegis Capital Corp. was founded in 1984 and is a full service retail and institutional broker-dealer located in New York City.  Aegis Capital Corp.’s main office is located at 810 7th Ave. 18th and 22nd Floor New York, NY 10019.

HANLEY LAW 

Our law firm represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  Our securities team is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  We have experience handling cases against the major Wall Street broker dealers.

Let our team work for you. Call us at (239) 649-0050 or contact us through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

NY J.P. Morgan Securities Broker Michael Fang Suspended and Fined by FINRA

According to FINRA’s Disciplinary and Other FINRA Actions publication, FINRA issued a suspension and fine against Michael Fang (CRD# 5653787) of J.P. Morgan Securities, LLC (CRD# 79). FINRA alleged that between May 2015 and August 2015, and while associated with J.P. Morgan Securities, Fang engaged in an outside business activity without providing any notice to his member firm in violation of FINRA Rules.

FINRA Rule 3270 prohibits a registered person from, among other things, being compensated or having the expectation of compensation from any other person as a result of any business activity outside the scope of the relationship with his or her member firm without providing prior written notice to the firm. FINRA Rule 2010 requires associated persons to “observe high standards of commercial honor and just and equitable principles of trade.” A violation of FINRA Rule 3270 is considered inconsistent with high standards of commercial honor and just and equitable principles of trade.

FINRA alleged that during the time period at issue, Respondent participated in an undisclosed outside business activity with a customer of J.P. Morgan to purchase high-end cars in the United States and export them to China. FINRA alleged that Fang’s role was to bring prospective customers to car dealerships to make purchases and then to assist with delivering those cars to United States ports for transport to China. FINRA alleged that Fang was not compensated from this business during the Relevant Period, but he entered the business arrangement with the expectation that he would receive approximately $250.00 to $400.00 for each car delivered. FINRA alleged that Michael Fang failed to notify his firm about his participation in the car exporting business. FINRA alleged that because of the foregoing Michael Fang violated FINRA Rules 3270 and 2010.

As a result, Michael Fang consented to FINRA imposing sanctions of a sixty (60) day suspension from associating with any FINRA member in any capacity and a fine of $5,000.

According to FINRA’s Broker Check, Michael Fang was registered with the securities industry for six (6) years, and was registered with the following firm(s):

J.P. Morgan Securities, LLC
CRD# 79
Fresh Meadows, NY
10/2013 – 09/2015

Essex National Securities, LLC
CRD 25454
Auburndale, NY
4/2013 – 8/2013

Chase Investment Services Corp.
CRD 25574
Oakland Gardens, NY
6/2010 – 9/2011

Northwestern Mutual Investment Services, LLC
CRD 2881
Great Neck, NY
3/2010 – 4/2010

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Hanley Law to discuss your legal options. The Hanley Law is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (239) 649-0050 for a complimentary initial consultation.